Electric vehicle sector hit hard by demonetisation: Industry body

“We have over-committed in going for demonetisation due to political reasons. This is just one of the ways of curbing the black money menace; there are 10 other steps that government must take up."ETAuto | November 25, 2016, 18:07 IST

NEW DELHI: Indian electric vehicle industry has been hit hard by the government's recent decision on demonetisation.

Sohinder Gill, Director- Corporate Affairs, Society of Manufacturers of Electric Vehicles said, "the EV industry has been badly hit, sales of EV’s in India has considerably slowed down. We have the basic and entry level EVs, which people use to purchase by paying cash. However, they also do not have bank financing facilities prompting people to use cash in purchases."

Gill opined that, “We have over-committed in going for demonetisation due to political reasons. This is just one of the ways of curbing the black money menace; there are 10 other steps that government must take up."

"What is happening is we are just clearing the black or old stock and replacing it with new. The new currencies in itself will not stop the creation of black money, as we all deal in cash. There is no billing of products and services and the tax paid invoice is also not in place in India. All these are funneling into black money ultimately.”

Sohinder Gill emphasised, the disbursement as per the FAME Scheme in India for the current year has been satisfactory only, as the desired sales are yet to pick up. During the financial year 2015-16, an amount of Rs 75 crore was allocated for this scheme, which was almost fully utilised.

In the current financial year 2016-17, Rs 91 crore (approx) has already been utilised out of the budget allocation of Rs 122.90 crore. But out of the Rs 91 crore the EV industry just got Rs 9 crore. This is because the rest of the money was for the other sectors as we could sell only 12,000 electric vehicles in the last six months, he added.